Bailing out states violates the Constitution’s ‘general welfare’ clause

By David B. Rivkin, Jr., and Lee A. Casey

6 May 2020 in The Hill

Republican senators, led by Majority Leader Mitch McConnell (R-Ky.), are right to oppose legislation that would provide a broad federal bailout of highly indebted states. Gov. Andrew Cuomo of New York calls this legislative stance “toxic and poison,” but it is constitutionally required.  

As senators, including Florida’s Rick Scott and Texas’s Ted Cruz, made clear in a recent letter to President Trump, no one doubts that the federal government can and should assist states in meeting the coronavirus emergency. Nor can there be any reasonable objection that this aid will benefit certain states — especially New York, which has the majority of coronavirus cases — more than others. There is, however, a profound objection to any plan that would use federal resources to ensure that heavily indebted states need not reassess their policy priorities. These states find themselves in dire fiscal straits primarily because of underfunded pension plans for their public employees. Virtually all of these states are Democrat-run and three of them — Illinois, New Jersey and Connecticut — are facing a particularly calamitous fiscal situation.

Politics aside, bailing out unfunded state pension plans with federal dollars would violate the Constitution’s often ignored, but nevertheless binding, “general welfare” clause. Congress does not, in fact, have unfettered power to spend money as it sees fit. The Constitution permits it to tax, and by implication spend, “to pay the Debts and provide for the common Defense and general Welfare of the United States.” (Art. I, § 8, cl. 1) This language was neither puffery nor surplusage, but was added by the Constitution’s Framers for a compelling purpose.

The Framers were determined to vest the federal government with sufficient authority to carry out its national purpose, but also to limit that power. These principles are reflected in numerous constitutional provisions and that document’s overall architecture. Thus, all congressional powers have some limit, some cabining principle. Just as the commerce clause is limited to the regulation of economic activities and does not permit Congress to exercise a general “police power” regulating people simply because they are here, so Congress’s ability to tax and spend is limited by the requirement that this must be for the general welfare.

This requirement stems from the Framers’ concern that large, powerful states would dominate the federal government and would use federal institutions to benefit their own interests, rather than the Union as a whole. Indeed, the question of how to ensure that a cabal of large states would not run roughshod over small states dominated much of the Constitutional Convention. It shaped many key constitutional provisions, including the bicameral federal legislature, with all states having equal representation in the Senate, the apportionment requirement for direct federal taxes, and the language mandating that “all Duties, Imposts and Excises shall be uniform throughout the United States.”  

Even such an ardent proponent of a strong federal government as Alexander Hamilton was sufficiently concerned about states acting selfishly that he argued initially for abolishing the states as independent sovereigns altogether because “states will prefer their particular concerns to the general welfare.” Eventually, this concern resulted in the constitutional language that required the federal government to operate for the general welfare of the entire nation. Notably, this language is found both in the Constitution’s preamble and Article I, Section 8, which enumerates Congress’s powers. And, as is made clear in an early draft of the general welfare clause, the Framers understood the phrase to mean that “which may concern the common interests of the Union.”

This understanding of the clause is similarly revealed in a debate that took place in September 1787, near the Convention’s end, after the general welfare language had taken its final form.  This debate concerned whether an additional provision should be included in the Constitution specifically vesting the federal government with the power to build canals, which would benefit some states more than others. Some thought yes; others argued that tasks such as canal-building should be the responsibility of the states that would directly benefit. Regardless of this disagreement, they all appeared to have shared the same view that such authority — which today we would take for granted as being well within Congress’s spending power — was not already present.

As in other areas, after the Constitution’s ratification, the Framers took different views of how far the spending power could go. Hamilton, always the preeminent Federalist, took the position that the power to tax and spend constituted a separate grant of authority to Congress, while James Madison believed it was merely a support for Congress’s otherwise enumerated powers.  Hamilton’s view prevailed and was endorsed by the Supreme Court in the 1936 case of United States v. Butler. The court did not, however, determine the meaning of “general welfare” in Butler, except to note that Hamilton understood it to mean “the purpose must be ‘general, and not local.’”

To be sure, the definition of what types of expenditures advance general welfare has been much debated throughout U.S. history. Prior to the Civil War, a stringent definition prevailed, with Congress vigorously debating expenditures for various types of infrastructure projects and presidents vetoing spending bills that they believed served local needs and did not sufficiently advance general welfare. Post-Civil War, and particularly following the New Deal, a far broader federal spending pattern emerged. This reflected the view that, using federal dollars to pay the costs of natural disasters and similar emergencies, or various infrastructure projects, while benefiting some states more than others at any given point in time, would benefit the nation as a whole in the long run. This practice broadened the understanding of what expenditures served the national interest, but it did not and could not abolish the general welfare requirement altogether.

Thus, however broad Congress’s power to tax and spend may be, this remains the fundamental limitation — expenditures must promote national, rather than local, interests. And it is difficult to imagine a more locally-oriented program than one designed to prop up the fiscal choices of a group of states — to benefit state and municipal government employees by establishing generous, underfunded pension systems — at the expense of other states. Significantly, numerous states repeatedly have rejected similar pension arrangements for themselves, vividly manifesting their view that this was not in their best interests or conducive to general welfare.  Indeed, by subsidizing a particular vision of what constitutes a proper state government, one of the basic justifications for our federalist system — that states can make their own choices as laboratories — would be discarded. True federalism requires that the federal government neither coerces states nor imposes on states’ fiscal burdens that properly belong to individual states that have incurred them.

Senate Republicans have every right, and all senators have an equal obligation, to ensure that any funding legislation meets the general welfare requirement, so that federal dollars cannot be used to pay, either directly or indirectly, for the repair of long-term fiscal liabilities of any recipient state.  

David B. Rivkin Jr. and Lee A. Casey practice appellate and constitutional law in Washington. They served in the White House Counsel’s Office and Justice Department under Presidents Reagan and George H.W. Bush and have litigated separation-of-powers cases, representing states in challenges to ObamaCare and the federal Clean Power Plan.

Source: https://thehill.com/opinion/judiciary/495961-bailing-out-states-violates-the-constitutions-general-welfare-clause

Presidential Power Is Limited but Vast

By David B. Rivkin Jr. and Lee A. Casey

15 April 2020 in the Wall Street Journal

President Trump has come under attack this week for saying he has “absolute authority” to reopen the economy. He doesn’t – his authority is limited. But while the president can’t simply order the entire economy to reopen on his signature, neither is the matter entirely up to states and their governors. The two sides of this debate are mostly talking past each other.

The federal government’s powers are limited and enumerated and don’t include a “general police power” to regulate community health and welfare. That authority rests principally with the states and includes the power to impose coercive measures such as mandatory vaccination, as the Supreme Court held in Jacobson v. Massachusetts (1905). Nor may the federal government commandeer state personnel and resources to achieve its ends or otherwise coerce the states into a particular course of conduct. There is no dispute about these respective state and federal powers.

In most federal-state disputes, the question is what happens when authorities at both levels exercise their legitimate constitutional powers and cross-purposes. Here, the president has the edge. The Constitution’s Supremacy Clause requires that when the federal government acts within its proper sphere of constitutional authority, state law and state officials must give way to the extent that federal requirements conflict with their own. Federal power encompasses a broad power to regulate the national economy. Thus although the president lacks plenary power to “restart” the economy, he has formidable authority to eliminate restraints states have imposed on certain types of critical commercial activity.

Much of this authority was established by Congress in the Defense Production Act of 1950, which Mr. Trump has invoked on a limited basis to require American manufacturers to make personal protective equipment and ventilators. Most of his current critics lauded these actions and urged him to do more.

The DPA was enacted principally to assures U.S. military preparedness. But it defines “national defense” broadly to include “emergency preparedness” and “critical infrastructure protection and restoration.” The law “provides the President with an array of authorities to shape national defense preparedness programs and to take appropriate steps to maintain and enhance the domestic industrial base.” It authorizes him to prioritize the production of certain products and to “allocate materials, services, and facilities in such a manner, upon such conditions, and to such an extent as he shall deem necessary or appropriate to promote the national defense.”

The DPA isn’t a bank check. The president cannot, for example, impose wage and price controls without additional congressional action, and he is often required to use carrots rather than stisk to achieve the law’s purposes. Nevertheless, because he is acting under an express congressional grant of authority, he is operating, as Justice Robert Jackson explained in his iconic concurring opinion in the “steel seizure” case Youngstown v. Sawyer (1952), at the apex of his legal and constitutional power.

Any state restrictions on commerce or personal behavior would have to yield to the federal imperative. “The states have now power, by taxation or otherwise, to retard, impede, burden, or in any other manner control, the operations of the constitutional laws enacted by congress to carry into execution the powers vested in the general government,”, the Supreme Court explained in McCulloch v. Maryland (1819). States, whether acting alone or in coordination, would be barred, for example, from forbidding their residents to return to work in critical industries, or from restraining industrial, agricultural, or transportation facilities in ways that impede the federal mandate.

That said, even the most expansive interpretation of the DPA, and other federal statutes regulating interstate commerce, wouldn’t permit President Trump to reopen all aspects of the American economy on his own authority. The reopening of many local businesses, such as restaurants and nonessential retailers, would be up to the states.

Thus state governors and lawmakers are as vital a part of this effort as the president and Congress. Federal and state officials have to work together, however much they may dislike each other politically or personally to get America back on its feet.

The truly difficult legal issues coming out of the Covid-19 crisis are whether government at all levels has sufficiently protected individual rights. All exercises of federal and state power, emergency or not, are subject to the overriding limitations of the Bill of Rights. The courts have traditionally taken the nature and extent of national emergencies into account in construing and applying these rights, but they cannot be ignored entirely.

So far the American people have largely accepted temporary restrictions on their liberty – especially freedom of assembly and religion – that may not stand up to court challenges. It would serve the president and governors well to make a priority of easing these restrictions and others as soon as possible after the worst of the danger has passed.

Mssrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served in the White House Counsel’s Office and Justice Department under Presidents Reagan and George H.W. Bush and have litigated separation-of-powers cases, representing states in challenges to ObamaCare and the federal Clean Power Plan.

Source: https://www.wsj.com/articles/presidential-power-is-limited-but-vast-11586988414

Probe the effort to sink Kavanaugh

By David B. Rivkin and Lee A. Casey

Sept. 29, 2019, in the Wall Street Journal

The effort to sink Justice Brett Kavanaugh’s confirmation cries out for investigation. The Senate Judiciary Committee has already made a criminal referral to the Justice Department regarding alleged material misstatements by lawyer Michael Avenatti and his client Julie Swetnick. And a new book by two New York Times reporters contains a potentially explosive revelation.

In “The Education of Brett Kavanaugh,” Robin Pogrebin and Kate Kelly report that Leland Keyser —who was unable to corroborate high-school friend Christine Blasey Ford’s allegation of youthful sexual misconduct—says she felt pressured by a group of common acquaintances to vouch for it anyway. The book quotes an unnamed male member of the group suggesting in a text message: “Perhaps it makes sense to let everyone in the public know what her condition is”—a remark the reporters describe as reading “like a veiled reference” to Ms. Keyser’s “addictive tendencies.” (The authors quote her as saying she told investigators “my whole history of using.”)

A concerted effort to mislead the Federal Bureau of Investigation and the Senate, especially if it involved threats to potential witnesses, could violate several federal criminal statutes, including 18 U.S.C. 1001 (lying to federal officials), 18 U.S.C. 1505 (obstruction of official proceedings) and 18 U.S.C. 1622 (subornation of perjury). Investigating and, if the evidence is sufficient, prosecuting such offenses would deter similar misconduct in the future.

It’s bad for the country when nominees are subjected to what Bill Clinton calls “the politics of personal destruction.” It intensifies political polarization and bitterness, traduces due process, dissuades good people from government service, and injures the reputation of the judiciary and other institutions.

The Senate and FBI could also consider changing the background-check process for nominees. Justice Kavanaugh’s opponents seem to have expected a full-fledged criminal-style inquiry into Ms. Ford’s allegations, although Senate Democrats had sat on them for months. But that’s not how background investigations work. They’re carried out by a special unit whose job is to verify information the nominee has provided and gather additional information that may reflect on his character and reputation. This process does not involve the same sort of searching questions that are characteristic of a criminal investigation. Nor do FBI background investigators routinely assess individual witness credibility. They reach no conclusions but collect information and then forward it to the White House and Senate. It is then up to the elected officials to decide who and what to believe. It is a political, not a criminal, process.

This is a matter of practice and tradition, not law. The FBI could be asked to conduct background investigations in a manner more comparable to its criminal and intelligence work, where agents will assess witness credibility and use those assessments to guide the focus and course of the inquiry. It should be especially vigilant to the possibilities of collusion and witness tampering, which are uniquely troubling in high profile confirmation battles.

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served in the White House Counsel’s Office and Justice Department under Presidents Reagan and George H.W. Bush.

Source: https://www.wsj.com/articles/probe-the-effort-to-sink-kavanaugh-11569786380

End the Media’s Campaign Privilege

The Trump era has seen an erosion of the distinction between journalism and partisan politics, with much of the mainstream media in open opposition to the president. “Balance has been on vacation since Mr. Trump stepped onto his golden Trump Tower escalator . . . to announce his candidacy,” New York Times columnist Jim Rutenberg wrote in August 2016.

Three years later, the holiday continues. Slate last month published a leaked transcript of a staff “town hall” at the Times. “We built our newsroom to cover one story,” executive editor Dean Baquet told employees, explaining that the paper’s narrative “went from being a story about whether the Trump campaign had colluded with Russia and obstruction of justice to being a more head-on story about the president’s character.” The new story, he said, “requires deep investigation into people who peddle hatred.”

Mr. Baquet makes the Times sound like an advocacy organization working against Mr. Trump’s re-election. Such organizations are regulated by campaign-finance statutes. So are other corporations, for-profit or nonprofit, that engage in electioneering speech. But those laws exempt media organizations, provided they are not owned by a political party, committee or candidate.

The justification for this favored treatment is the media’s “unique” role in public discourse and debate. But that has changed—and not only because the media have become more partisan. “With the advent of the Internet and the decline of print and broadcast media,” the Supreme Court observed in Citizens United v. Federal Election Commission (2010), “the line between the media and others who wish to comment on political and social issues becomes far more blurred.”

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Alito Teases a Judicial Revolution

By David B. Rivkin Jr. and Lee A. Casey

23 June 2019 in the Wall Street Journal

The Supreme Court’s decision last week in Gundy v. U.S. was deceptively anticlimactic. The vote was 5-3, but there was no majority opinion and the decision made no new law. Justice Samuel Alito’s lone concurrence, however, suggested that a major break with precedent—and a return to the Constitution’s original meaning—will soon be in the offing.

The Constitution’s first clause after the Preamble states: “All legislative Powers herein granted shall be vested in a Congress of the United States.” Since 1935 the justices have ignored that provision and permitted lawmakers to delegate their authority to the executive branch. At issue in this case was a provision of the Sex Offender Registration and Notification Act of 2006, or Sorna, that directed the attorney general to “specify the applicability” of the law’s registration requirements to offenders, like Herman Gundy, whose crimes predated the act. Mr. Gundy, who was sentenced to 10 years in prison for failing to register, claimed this delegation was illegitimate.

The case was heard four days before Justice Brett Kavanaugh’s confirmation. Had Justice Alito dissented, the resulting 4-4 split would have upheld the lower court’s ruling against Mr. Gundy without any opinion being issued. Instead, Justice Alito joined his four liberal colleagues in rejecting Mr. Gundy’s appeal but said he was prepared to switch sides: “If a majority of this Court were willing to reconsider the approach we have taken for the past 84 years, I would support that effort.” A dissent from Justice Neil Gorsuch, meanwhile, set forth the case for nondelegation.

In their quest to control governmental power and protect individual liberty, the Framers separated federal power among three branches of government. As Justice Gorsuch notes, they also “went to great lengths to make lawmaking difficult,” requiring consent of both houses of Congress and the president, or legislative supermajorities. The veto was the executive branch’s only role in the legislative process.

That was deliberate. Justice Gorsuch quotes Montesquieu, who was quoted by James Madison in Federalist No. 47: “There can be no liberty where the legislative and executive powers are united in the same person, or body of magistrates.”

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Demanding Trump’s tax returns is congressional overreach

By David B. Rivkin Jr. and Lee A. Casey

17 May 2019 in The Hill

Democrats in Congress long have demanded that President Trump make his tax returns public. Many promised voters that, if given the House majority in the 2018 elections, they would force public disclosure of Trump’s returns. Indeed, they’ve demanded access to the president’s returns, but Treasury Secretary Steven Mnuchin has refused to give Congress that access. He was right to refuse. His action is firmly grounded in federal statute and the Constitution.

In April, House Ways and Means Committee Chairman Richard Neal (D-Mass.) demanded Trump’s tax returns from 2013 to 2018, invoking a federal statute (26 U.S.C. § 6103) that makes federal tax returns confidential. Other statutory sections, including 26 U.S.C. § 7213, make it a felony to disclose information in federal tax returns without proper authorization.

There are narrowly drawn exceptions to the general rule of confidentiality, including one that allows congressional tax committees to demand copies of individual tax returns. That information, however, cannot be made public without the taxpayer’s written consent. Secretary Mnuchin must have a well-grounded fear that one or more members of Congress would make the president’s returns public, hiding behind the Constitution’s speech or debate clause to escape prosecution. This factor alone can preclude the release of tax information.

There are, however, even more fundamental problems with the request. The committee’s stated purpose is to investigate how the IRS enforces tax laws against sitting presidents. That is an obvious pretext. Even if the Democrats’ posturing could be ignored, the fact that only Trump’s returns are sought — and not those of former presidents — makes the game clear. Read more »